Americans spend billions during the holiday season and usually more each year.
This year could prove more challenging, but whatever the final numbers turn out to be, a portion of those dollars end up in banks and credit unions as interest payments or transaction fees. Most people, according to a 2022 Bankrate survey, plan to use credit cards (54%) and/or debit cards (50%) for at least some of their holiday purchases.
Cagey bank CMOs can direct a bigger share of that massive holiday spending toward their banks and credit unions. Unfortunately, the holidays are a rough time to launch a campaign.
“The holiday season is full of distractions,” says Josh Mabus, founder and president of the Mabus Agency, which specializes in financial service marketing. “It’s difficult to get a share of mind when people are interested in spending money. They’re not checking their personal financial management software, they’re not looking at their debt. They’re thinking about making someone in their life happy.”
As if financial marketers didn’t have enough trouble, Bankrate’s September 2022 study revealed serious financial anxiety among consumers: 40% say inflation will change the way they shop and among that group, 95% are looking to save money with coupons, discounts, even second-hand gifts. On top of that, most shopping will start in October — long before ad campaigns for year-end holidays appear.
In other words, holiday ad campaigns face a bleak consumer mindset in a noisy environment and a protracted holiday schedule. It’s not an ideal environment. Yet to perceptive financial marketers with ad campaigns that meet the moment, the 2022 holiday season has certain advantages.
Cost, Security and Points Are Bank Card Differentiators
The most significant factor impacting the 2022 holiday season is financial anxiety. Ted Rossman, senior industry analyst at Bankrate, says inflation, a possible recession, and supply chain disruption fuel consumer concern. But all concerns are not equal. “Reading the tea leaves, I think people are probably more worried about a potential recession’s impact on their finances than they are about the supply chain,” he tells The Financial Brand. “They’re thinking about inflation, higher interest rates, job losses — it’s all tied together.”
Economic fear is too salient for bank marketers to ignore. Helpfully, however, eight in ten customers feel strongly their banks are in a position to help them improve their overall financial health, says a 2022 J.D. Power study. That presents marketers with an opportunity to triangulate consumers’ positive beliefs about their financial institution with products that ease their financial anxiety, such as low or no-fee credit products or early access to direct deposit payments.
That notion can be reinforced by highlighting anti-fraud features, especially in campaigns geared to Millennials. Most holiday shopping will be done online, and Millennials are the internet’s best shoppers — and the likeliest victims of identity theft.
Fanning Consumer Fears:
Inflation, a possible recession and supply chain disruption are impacting consumer spending.
In any case, messages about credit will probably find a receptive audience. Fewer than four in ten consumers will pay their credit card in full this winter, Bankrate found, while over a quarter say they’ll go into debt buying gifts. Interestingly, a tenth will use a buy now, pay later service, Millennials chief among that group.
“I think generally young adults are drawn to buy now, pay later because if you’re younger, you may not have a great credit score or any credit score at all,” Rossman says. “And young adults tend to be more debt averse. I think it has to do with their student loans. The last thing they want to do is add more to that.”
So a promotion that delays payment or offers points, short-term loans, partner discounts and the like can be especially attractive to shoppers. The most effective promotions may be cash-back rewards, however, as consumers prefer them over all credit card features, Bankrate found.
Promote Sooner, Even if It’s Low-Key
Whatever the message, it can’t come too soon. Shoppers are out in force in the fall — the National Retail Federation predicted a record $10.6 billion in spending on Halloween 2022 alone — and Amazon scheduled a sale similar to Prime Day for October 11-12, 2022. Those two retail bonanzas expand bank and credit union brand-awareness opportunities just as consumers kick off their biggest spending of the year.
“Organizations have hearts, they have pulses. Consumers are looking for that.”
— Josh Mabus, Mabus Agency
Unfortunately, ad budgets are often allocated by then on products and concepts geared to year-end holidays. A promotion won’t get far on a sleigh, in other words, when customers are thinking about hayrack rides.
So if the money’s spent, a CMO’s best bet is probably a promotional strategy that’s low-key, low-cost — and local.
Community banks Banterra Bank in Illinois and Metairie Bank in Louisiana provide good (and good-natured) examples: Banterra ran a Facebook event that awarded one randomly selected winner a $25 autumnal-themed Starbucks gift card for “liking” the page. Metairie Bank sponsors a family festival called “Monster Mash” every fall to raise funds for a local parenting center.
If the ad money’s spent, a bank CMO’s best bet is probably a promotional strategy that’s low-key, low-cost — and local.
Though relatively inexpensive, these strategies accomplish several objectives. Banterra’s posts increase engagement with their Facebook page and promote “brand building by brand association with popular brands such as Starbucks,” says Banterra’s Director of Marketing, Jennifer Spence.
Metairie’s event sponsorship serves a similar purpose, and creates bonds between employees as well. “We love the work [the parenting center] does and believe in its cause, and we’re happy to be part of it,” says Metairie’s marketing coordinator, Rachel Marks. “And it’s a good way to build brand recognition and a goodwill connection with the community and between the bank’s volunteers.”
That kind of grass-roots advertising is effective, Mabus says, because it’s authentic. “It has to come from the bank and be of the bank,” he says. “Organizations have hearts, they have pulses. Consumers are looking for that.” In fact, he recommends engineering ad campaigns centered on Thanksgiving because its communal spirit “aligns with most [bank and credit unions’] mission/vision statements,” whereas Christmas is a religious holiday, attended by a different set of values.
The Holidays Call for Cost- And Credit-Sensitive Products
“Values” is a key word for CMOs. Associating the financial institution’s values with consumers’ values is always good practice — and the holidays activate people’s value systems like nothing else.
It pays to remember, however, that one of those values is frugality. In 2022, many bank customers and credit union members are shopping in a state of financial anxiety. Easing their fears — and starting early — with cost- and credit-sensitive products may be the most valuable thing a marketing strategy can do during the holidays.